5 Things You Didn’t Know: Starbucks

They are largely responsible for turning a diner’s 50-cent cup of joe into a travesty, or at the very least, a pedestrian pursuit. Their “stores” seem to be everywhere, and they’re populated by coffee snobs on both sides of the counter. They appear either indifferent to, or beyond the reach of, fluctuating economies. They are accused of everything from the annoying (market saturation) to the serious (anti-competition), yet Starbucks — the world’s biggest coffee peddler — keeps on peddling.

There may be no better example of the company’s imperialist domination — and the scorn they sometimes inspire — than the shocking installation of a Starbucks store in Beijing’s Forbidden City in 2000. You can’t blame Starbucks for salivating over the real estate; almost 9 million people visited the former home to 24 different Chinese emperors in 2006. Nonetheless, it took seven years of protesting, 500,000 signatures and a refusal on Starbucks’ part to sell other brands to finally drive them out in 2007.

Love ‘em or hate ‘em, here are five things you may not know about Starbucks, your friendly, ubiquitous coffee house.

1- On average, two new Starbucks have opened every day since 1987

Starbucks has been around since 1971, but it wasn’t aggressive about expansion until 1987, when the company came under the ownership of its current chairman, Howard Schulz. At that time, there were only nine Starbucks stores.

Today, there are about 14,396 (give or take a few). pide that number by 20 years, or 7,300 days and, after rounding up, you get an average of 2 stores per day opening every day for the last 20 years. Naturally, this figure does not include the few stores that, for whatever reason, were shut down.

2- Its name comes from Moby Dick

Confirmed by the company’s current fact sheet, Starbucks was named for the first mate of the Pequod in Melville’s Moby Dick. The question is, why? After all, the company seems more like Captain Ahab than Starbuck. In the famous novel, Starbuck and Ahab are at opposite ends of the philosophical spectrum: the first mate is superstitious and conservative, Ahab is narcissistic and monomaniacal. Starbuck is practical, opposing Ahab’s desire to commit the Pequod to circling the world’s oceans in search of the white whale in favor of a commitment to harpooning whales they can sell on the Nantucket Market. Ahab is single-minded, bent on not only killing the white whale, but also on relieving mankind of the source of its evil. Swap out a few of the right words above with terms like “market domination” and “its competition,” and you have Ahab’s, the world’s biggest coffee peddler.

The only ostensible Starbuck-like thing about Starbucks is the conservative evolution of its logo. It used to feature a bare-breasted mermaid but has, over time, developed a degree of modesty that would please the Pequod’s first mate: Initially, her hair covered her breasts, then they were cut out of the frame altogether.

3- Its founders sold Starbucks in 1987 to build Peet’s Coffee & Tea

Here’s the condensed company time line:

1966: Alfred Peet opens Peet’s Coffee & Tea in Berkeley, California.

1971: Jerry Baldwin and two other friends of Alfred Peet open the first Starbucks in Seattle.

1982: Howard Schultz joins Starbucks.

1984: Baldwin et al buy out Peet’s.

1987: Baldwin et al sell Starbucks to Schultz to focus on building Peet’s.

It’s not all about coffee and biscotti at Starbucks…

It should be noted that after working there for a very short time, Schultz left Starbucks to launch a line of specialty coffee stores in Seattle. He was able to raise enough money to buy Starbucks in 1987.

Additionally, today Starbucks’ market share is about 70 times the size of Peet’s, but despite the seeming similarity between the two companies, they have somewhat different business models and each has seen considerable success according to those models.

4- Part-time employees are entitled to full benefits

Starbucks seems to have a perennial spot on Forbes’ list of the “100 Best Companies to Work For,” and it has little to do with the weekly coffee or tea each “partner” takes home.

For starters, Starbucks takes a page from Warren Buffett’s playbook and calls its employees “partners,” even though they hardly qualify as such in a true business sense. The use of such a loaded word goes a long way in breeding company loyalty.

More importantly, they offer an enviable benefits package, one inspired by the childhood of Chairman Howard Schultz. As a boy, he watched his father work low-paying jobs and retire with little to show for his life, and Schultz wanted something different for employees of his company. The result is a benefits package given to employees who work a minimum of 20 hours per week that includes health, medical, dental and vision plans, a 401k, and access into Bean Stalk, the company’s employee stock option plan.

If that weren’t already enough, those benefits extend to the opposite and same-sex spouses of these employees.

5- Starbucks doesn’t franchise its stores

As a rule, Starbucks stores are not franchised to private inpiduals, and the company has no intention to begin doing so. The mentality has a lot to do with maintaining high company standards from store to store; standards that would be difficult to enforce if they were franchised.

The one exception regards their willingness to enter into certain licensing agreements with companies who hold, or have access to, locations Starbucks regards as desirable. To quote from the FAQs on their home page, these sites include “airport locations, national grocery chains, major food services corporations, college and university campuses, and hospitals.” These licensed locations represent over one-third (36%) of all Starbucks stores operating in the U.S.

Starbucks has made a point of being wherever you are. They have a tremendous, almost inescapable, presence in countless, high-traffic neighborhoods. Yet they’re also somewhat cutting-edge, not just in how they treat their employees or in their gutsy (if questionable) expansion tactics, but also in their efforts to stay relevant. This is evidenced in such ventures as adding Wi-Fi connections for customers, building Starbucks Entertainment (film production) and Hear Music (music production) and, most recently, partnering with Apple to allow customers to download songs they hear in a Starbucks from iTunes.

If Starbucks has its way, public interest will continue to rise in the coming years. According to a Time magazine article from 2006, the company aims to open another 25,000 stores in the future, bringing the total number of Starbucks stores worldwide to 40,000.

In case you’re curious, that’s 9,000 more stores than that other corporate intrusion on other cultures (read: McDonald’s) currently has in operation worldwide.

13 thoughts on “5 Things You Didn’t Know: Starbucks”

Im really torn on your article. I thank you for including the good information about benefits but am slightly dismayed at your overall take on starbucks as an overwhelming corporate giant hellbent on eating the nation. There are many other things lots of people dont know about Starbucks. For instance, are you aware that Starbucks typically pays a premium price above the current market value for its coffee beans from origin countries? They have also worked hard to establish pricing guidlines with their farmers that reward their farmers for economically sound and eco-friendly practices. In addition, though you point out that they have approx. 70% of the specialty coffee market share in the US, are you aware that they purchase less than 2% of the coffee that is traded globally? Though you claim the term is merely going “a long way in breeding company loyalty,” the employees are actually partners in the business as any partner thats eligible for benefits also receives stock options at the end of their first year. The company also frequently provides cash bonuses to partners at every level when they have a good fiscal quarter. Also you are quick to claim that Starbucks is on a mission to “harpoon” its competition however would you not agree that without the brand and market that Starbucks essentially created in the late 80’s, said competitiors would never have become as pervasive? Outside of a few major cities such as NYC or Seattle specialty coffee bars were rare then and certainly not aimed at the broad spectrum of people that frequent them now. One might claim that by being agressive towards its competition Starbucks is only defending turf it owned to begin with. And lastly noone, not Starbucks or even Jesus, could have put a store in the Forbidden City without first being given permission. So while it seems easy to blame the big american corporation for defiling the ancient city maybe we could ask ourselves who invited them in to begin with. I did appreciate your article, and admittedly I am a kool-aid drinking Starbucks partner but i would advise you to do more research on companies before you forge an opinion on their worth.

Kevin admits that he’s drinking more than coffee at his starBUCKS store so his company man attitude comes as no suprise. He would like to say, “How dare you slight my employer.”, in a big loud fashion… to which we giggle.

Ross, you’ve done more than enough research.

ps
You should see the starBUCKS litter behind the big new store here on 57th AVE.. Think these fake ecoturds will spend five minutes a week picking it up?

I did my own research on Starbuck’s way back as well. I walked into a large number of both full and licensed stores and tasted the coffee. I’m not talking about the massively sweetened coffee based drinks, I mean the coffee. The actual black, hot stuff served in a cup. Horrid. Burnt and bitter tasting. I tried in numerous times because I just couldn’t fathom that THIS evil tasting brew was what the entire world was going on about ad naseum. I’ll go out of my way to find a mom and pop or even a smaller chain store (Peets, It’s A Grind, etc) or even a 7-11 to avoid Starbuck’s overpriced bottom of the pot flavor.